Another year has passed and the Joint Center for Housing Studies of Harvard University has just released the The State Of The Nations Housing 2012.
For relative new-comers to the Tallahassee Real Estate Blog, Harvard’s The State Of The Nations Housing 2012 is part of an annual series of US housing reports that the school publishes in June of each year. This will be our fourth consecutive year to provide access to the report, as well as provide a general overview of what you will find when you read it.
If you are a glutton for punishment, you can read all four reports and reviews here:
- The State Of The Nations Housing 2012
- The State Of The Nation’s Housing 2011
- The State Of The Nation’s Housing 2010
- The State Of The Nation’s Housing 2009
Summary Of The State Of The Nations Housing 2012
The State Of The Nations Housing 2012 is broken down into 7 sections, and but for the most concerned investor or analysts, the Executive Summary will be all that is needed to understand the message coming from the Joint Center For Housing Studies of Harvard University.
- Executive Summary – This “summary” is six pages long, and it is perhaps the best source of information on the current conditions in the US housing market you can find without paying somebody. With so much garbage being spewed by NAR and other real estate reporting organizations, The State Of The Nations Housing 2012 is refreshingly honest and filled with supporting data for the findings.
- Housing Markets – Signs of a housing market rebound are all around us, yet falling home prices, the large backlog of foreclosures, and the tight lending environment are restraining the recovery. While The State Of The Nations Housing 2012 report is not overly positive, I am excited because they are finding more positive signs in the US market than can be seen thus far in the Tallahassee real estate market.
- Demographic Drivers – This chapter provides the greatest reason for optimism in The State Of The Nations Housing 2012. New household formations have been slowing over the past five years so much that the Joint Center For Housing Studies of Harvard University feels that we have built a back-log of demand that should present itself as the economy recovers. They point out that had new household formations only held at the pace of the past 40 years, there would be an additional 1.1M households in the US today.
- Home Ownership – Home ownership trends remain on the decline, and with the backlog of foreclosures and non-performing loans still to clear, The State Of The Nations Housing 2012 forecasts it to continue falling. The study does point to the echo-boom generation as the next group to look to for gains in home ownership. The “elders” of this generation are only 25, so they won’t have an immediate impact on the market, but when they do, it will be healthy. This generation already has a higher population than did baby-boomers at the same age.
- Rental Housing – With more short sales and foreclosures being pushed through the sales market, more people are moving to the rental market as tenants. Vacancy rates are dropping, rental rates are rising, thus returns on rental properties are on the rise. This chapter of The State Of The Nations Housing 2012 is a very good read as it helps explain the undeniable link between the “for sale” market and the “for rent” market. You cannot study one without also understanding the other.
- Housing Challenges – The State Of The Nations Housing 2012 explains that rising rental rates mean that a higher percentage of US citizens will not longer be able to afford quality housing. The study forecasts the burden on the Federal Government will rise and home affordability will be a topic for many years to come.
- Appendix Tables – For all of you data enthusiasts, The State Of The Nations Housing 2012 includes 15 different tables full of supporting information for their conclusions. Not for the faint of heart, but far more useful than many real estate reports provide.
Investors Should Read The State Of The Nations Housing 2012
Considering that many of us have a hard time reading even short documents, I strongly endorse full consumption by real estate agents, real estate investors, and all other real estate professionals.
The Joint Center For Housing Studies of Harvard University’s study is the one report I actually have marked on my calendar, so that each year I am able to read it on the day that it is published.
Needless to say (but I will say it anyway), take a look at The State Of The Nations Housing 2012 and let me know what you think, I believe you will be wiser for it.